Insights

Online Dispute Resolution: one week in

As of 15 February, consumers in the EU can settle their disputes with EU traders using the new EU Online Dispute Resolution (ODR) platform for domestic and cross-border claims. The link on the European Commission's website is now live; the platform is free to use and is available in all the official languages of the EU.

What is it?

ODR is an Alternative Dispute Resolution (ADR) procedure conducted entirely online. The platform will link to all the ADR entities notified by the Member States, providing consumers and traders with the option to resolve their disputes using such "approved bodies" without going to court in an easy, fast and inexpensive way.

As part of the broader Digital Single Market strategy, the motivation behind the platform is to enhance consumers' confidence in purchasing goods and services online, ultimately encouraging the free movement of goods and services, and economic growth.

Further to Directive 2013/11/EU on ADR, the ODR platform has been introduced to the UK under the Alternative Dispute Resolution for Consumer Disputes (Amendment) Regulations 2015 (SI 2015/1392).

How does it work?

The interactive portal works as follows:

The consumer sets out the details of their complaint (including which country the consumer resides in, the name and details of the trader, a description of the complaint, the price paid, and the order reference number) by completing certain fields on the portal.

The complaint is then sent to the trader, for the parties to agree on an ADR entity to hear the claim and produce an outcome.

If an ADR entity is agreed, the complaint is automatically transferred to that entity via the platform.

The ADR entity then manages the case online, reaching an outcome within 90 days.

What do businesses need to do?

Businesses selling goods, services or digital content to consumers online (via their website or an online marketplace), will need to take certain steps to inform consumers about the ODR platform e.g. by including: (i) an "easily accessible" link to the platform on their websites; (ii) a link to the platform in emails offering the goods or services to consumers; (iii) the information in its general terms and conditions; and (iv) the trader's email address on their websites. Where a trader has to use a particular ADR provider (e.g. Ofcom or FCA-approved schemes in relation to telco or financial services disputes respectively) this also has to be set out on the trader's website.

Traders are not obliged to accept or engage in ADR, so to some extent, the ODR framework is not an entirely compulsory regime. However, businesses do need to engage in the framework given that they are required to provide notice of the ODR platform to consumers as set out above.

In practice

The European Commission's January Factsheet states "the platform is user-friendly, multilingual and accessible to all". Consumers will welcome this potentially cost and time effective solution to disputes with traders using a 21st century mechanism. Whilst the same may be true for traders, they will need to ensure they have taken the appropriate steps to inform consumers of the ODR framework and have appropriate internal procedures in place to promptly deal with claims received via the portal.

This article was written by George Willis. For more information please contact George on +44 (0)20 7427 6691 or at george.willis@crsblaw.com.

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